S&P 500 - IS THIS A CRASH/ OR HEALTHY CORRECTION TO AVERAGE
Above is a chart of the S&P 500 since 1950 (adjusted in Log). The yellow line represents the mean (average) price. It is well known that price naturally gravitates towards the mean, always!
Notice how the price of the S&P 500 has not had a significant drop below the mean, since the early 1980's. It had a brief stint below trend, during the 2008 financial crisis.
Why has the S&P 500 not had a significant dip below the mean since 1980? Is it a booming economy? Is it an educated and financially literate workforce? I will talk about this in a future post. For now, I just want to pose the question and get the cogs turning. What has caused the high deviation from the mean in the past 30 years, and specifically the past 12?
I want to throw this other statistic out there. Interest rates in the 80's were around 16%. Today? The lowest they have ever been. Less than 1%.
Form your own hypotheses, and please share them. I'd love to hear your thoughts.
Notice how the price of the S&P 500 has not had a significant drop below the mean, since the early 1980's. It had a brief stint below trend, during the 2008 financial crisis.
Why has the S&P 500 not had a significant dip below the mean since 1980? Is it a booming economy? Is it an educated and financially literate workforce? I will talk about this in a future post. For now, I just want to pose the question and get the cogs turning. What has caused the high deviation from the mean in the past 30 years, and specifically the past 12?
I want to throw this other statistic out there. Interest rates in the 80's were around 16%. Today? The lowest they have ever been. Less than 1%.
Form your own hypotheses, and please share them. I'd love to hear your thoughts.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.